Frank Vogel's GSFS has been trolling the DNB (De Nederlandsche Bank – The Dutch Bank) to the max.

His firm GSFS, once closely tied to Van der Moolen, is a specialist in international dividend tax arbitrage. Taking advantage of loopholes in international tax laws, the firm has always been controversial and hated by the all tax authorities.

Vogel isn't short of bravoure, and knows what he's doing because in spite of all predictions (“loopholes will be closed by Brussels”) he's still doing fine.

Pension fund

For his firm he created a pension fund. That's nice, as pensions aren't very common in the business. Turns out this pension fund, for the 17 employees, is launched a few years ago to live in a tax friendly zone.

The GSFS pension fund is only active in dividend arbitrage. DNB is responsible for monitoring the Dutch pension funds, and decided GSFS' alternative investment strategy didn't fit for a pension fund.

“Dividend stripping may not be the DNB's most favourite pension investment strategy“, GSFS responded, “but we follow the rules and suggest the DNB starts doing the same“.

2 million claim

DNB had no choice but to agree. Frank Vogel doesn't stop here, he claims EUR 2 million from the DNB. During all discussions with DNB, the trading activity of GSFS pension fund was halted. Their missed opportunities are valued at 2 million, and somebody's got to pay for it. And it's not going to be GSFS.

It will drive people crazy at DNB. He may even win the case. A larger, serious pension fund managed to get compensation for opportunity loss after forced selling of their gold holdings in 2013 (link – nl).

Depends on exactly what occurred and the legal remit of DNB. If they ordered them to halt activity pending investigation then there should be a case, if GSFS halted of their own free will because they were worried about what may happen then don’t think DNB has anything to answer for.

Must say it seems odd, would expect no action to be taken during investigation, if in breach of rules then fine them and let it go through legal process then. Many countries have laws to protect regulatory institutions from reprisal so that they can do their job and investigate/bring charges if the rules are suspected to have been broken, but that shouldn’t stop the party being investigated from carrying on what they’re doing until charges are pressed etc.